Market Brief
Very slow start to the trading week and with no top tier economic data scheduled, we expect trading to be subdued. Risk appetite was mixed initially, as a Der Spiegel report out over the weekend, which claimed the EU had decided on a eur25bn bailout plan sent the EUR higher but later in the trading session the report was denied by the German Finance Ministry. There was also the Soros article in the FT, which questioned the viability of the EUR, which also weighed on the single currency. In an interview with the BBC, Greek Prime Minister Papandrou stated that Greece was not interested in a “bailout”, but would be interested in solutions which allowed them to "borrow at the same rate as other countries, not at high rates which, in fact, undermine our possibility for making the changes and cutting down our deficit". By suggesting an adjustment to the market rules, it seems like Greece is basically asking for a bailout but doesn’t like the unpleasant sound of the word. On a side note, there are rumours that Greece’s PDMA will try and auction eur5bn of 10yrs bonds this week. The EUR trading has been based heavily on CDS spreads and any further widening of spreads will hurt the single currency. Markets continue to speculate of the potential of a Chinese CNY revaluation in order to contain inflationary pressures. Rapid growth in certain sectors of the economy has caused the PBoC to raise the reserve requirements twice already this year, seemingly illustrating policy maker’s strong commitment to appropriate policy action. The highlight of the week should be Bernanke’s testimony on Wednesday which proceeds the hiking the discount rate.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10,400.47 | 2.73 |
| Hang Seng Index | 20,323.68 | 2.15 |
| Shanghai Index | 3,003.40 | -0.48 |
| FTSE futures | 5,345.00 | 0.75 |
| DAX futures | 5,724.00 | -0.06 |
| SMI Futures | 6,658.00 | 0.12 |
| S&P future | 1,108.30 | 0.18 |
| World Markets | Current Level | % Change |
| Gold | 1,122.76 | 0.31 |
| Silver | 16.48 | 0.31 |
| VIX | 20.02 | -2.94 |
| Crude wti | 80.05 | 0.3 |
| USD Index | 80.55 | -0.01 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Base Rate Announcement, % | 5.75 | 6 | HUF / 13.00 |
| GDP, % y/y | -2.6 | -6.2 | MXN / 14.00 |
| San Francisco Fed President Yellen (FOMC non-voter | -- | -- | USD / 16.00 |
| BoJ minutes published | -- | -- | JPY / 23.50 |
Currency Tech
AUDUSD
R 2: 0.9090
R 1: 0.9040
CURRENT: 0.9005
S 1: 0.8880
S 2: 0.8790
USDCAD
R 2: 1.0580
R 1: 1.0530
CURRENT: 1.0390
S 1: 1.0355
S 2: 1.0305
EURJPY
R 2: 127.10
R 1: 126.45
CURRENT: 124.83
S 1: 123.55
S 2: 122.75
USDMXN
R 2: 12.975
R 1: 12.927
CURRENT: 12.779
S 1: 12.685
S 2: 12.615
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
